ttb analytics assesses that Thailand's tourism sector is recovering better than anticipated due to the reopening of the country, which has made travel in and out much easier. There is also a growing demand for travel to compensate for previous restrictions (Pent Up Demand), positively impacting Thailand's key tourism season in the second half of 2022. It is estimated that the number of foreign tourists in 2022 will reach 9.5 million, benefiting from the nearby tourist markets, especially from ASEAN, India, and the Middle East. For 2023, it is projected that the number of foreign tourists will be 18.5 million, accounting for 46% of the foreign tourist numbers in 2019, before the COVID-19 outbreak, and will be a significant driver for Thailand's economy to grow by 3.7% in 2023.

Foreign tourist numbers in the first 8 months of the year approached 4.4 million, led by nearby tourist markets.

The overall global tourism landscape in 2022 shows continuous signs of recovery, driven by the easing of concerns regarding the COVID-19 pandemic, along with higher and more widespread vaccination rates. This has led many countries, including Thailand, to gradually relax international travel measures since mid-year, resulting in a noticeable increase in travel demand from both domestic and international tourists. This is reflected in the improving numbers of foreign tourists visiting various countries, including Thailand, where the accumulated number of foreign tourists from January to August reached 4.4 million, or nearly 20% of the pre-COVID-19 tourist numbers.

It is noteworthy that the majority of foreign tourists visiting Thailand recently came from countries not far from Thailand. Over one-third of the accumulated foreign tourists in the first 8 months were from neighboring countries (such as Malaysia, Singapore, Vietnam, and Laos). This is partly due to the relaxation of cross-border travel measures and reduced entry fees, making it easier for travelers to enter and exit through Thailand's border checkpoints. Additionally, the push into the Indian market through a Roadshow earlier this year to compensate for uncertainties in the reopening of the Chinese market, along with the introduction of direct flights covering secondary cities in India, has significantly increased the number of Indian tourists to Thailand from an average of 10,000-20,000 per month at the beginning of the year to 110,000, making Indian tourists the second-largest foreign tourist group after Malaysia. The Middle Eastern market, which has high purchasing power, has also shown remarkable growth, particularly from Saudi Arabia, the UAE, and Israel, contributing to tourism revenue growth.

Furthermore, when considering the number of international commercial flights arriving at major airports (Suvarnabhumi and Don Mueang), it has doubled from 3,774 flights in January to 7,659 flights in August, or about 46.5% compared to pre-COVID-19 levels. It is expected that this number will continue to rise in line with travel demand during the year-end tourism festival, potentially reaching 60% by the end of this year.

ttb analytics estimates foreign tourists this year will exceed expectations at 9.5 million, with a projection for 2023 potentially reaching 18.5 million.

Since the announcement to lift restrictions for foreign tourists visiting Thailand by abolishing the Thailand Pass system, this has become a significant boost for foreigners to travel conveniently within Thailand, especially during the second half of 2022 tourism season. Although countries in the Asia-Pacific region are also signaling to open up for foreign tourists, it is expected that this will not impact Thailand's tourist numbers at the end of the year, as the behavior of traveling abroad after reopening will primarily start from short-haul destinations this year. Thailand benefits from neighboring countries, as well as India and the Middle East, similar to the reopening of the Asia-Pacific group, which mainly consists of tourists from nearby countries such as Japan, South Korea, China, Taiwan, and Hong Kong.

Therefore, ttb analytics estimates that the number of foreign tourists entering Thailand in the second half of 2022 will be 7.3 million, an increase of 2.5 times from the first half, resulting in a total of 9.5 million foreign tourists for the entire year 2022 (up from the previous estimate of 7 million), generating approximately 460 billion baht in revenue. For 2023, it is expected that the number of foreign tourists will be 18.5 million, or 46% of the foreign tourist numbers in 2019.

However, even though economic activities reflected through mobility data (Google Mobility Data) in tourism-related categories have started to return to normal since February, the overall recovery level remains significantly lower than before the COVID-19 situation. This is reflected in the Service Production Index in the accommodation and food service sector, which is still about half of the pre-crisis level. The recent tourism revival in the country has been primarily supported by domestic tourism, limiting the recovery of provinces that heavily rely on foreign tourist income. This is consistent with the occupancy rate in the southern region averaging only 40%, compared to the northern region's occupancy rate, which relies more on Thai tourists at 50%.

The hotel business in 2023 still faces many challenges, recommending adjustments to reduce costs.

Although the hotel business that relies primarily on Thai tourist income shows signs of a faster recovery due to domestic tourism momentum, ttb analytics believes that the Thai tourism sector will only return to normal by the end of 2024, meaning the hotel business will still face many challenges in 2023 as some high-spending Thai tourists will begin to travel abroad more. Meanwhile, revenue from foreign tourists is expected to return to pre-COVID-19 levels, but may have to wait for the main driving force from Chinese tourists, who are expected to fully return to Thailand in the second half of 2023.

Additionally, the overall supply of hotel rooms is expected to increase rapidly, as some hotels that previously faced losses will resume full operations as tourism begins to recover. New rooms will be added from the opening of more than 20 large hotel operators in 2023, after delaying openings during the lockdown, amidst intensified price competition in the hotel business. This is evident from the average room rates nationwide currently being over 30% lower than pre-COVID-19 levels, contrary to rising labor and operational costs.

Key strategies for the hotel business must focus on adapting to changing tourist behaviors, incorporating technology, and increasing online sales channels, as well as enhancing operational efficiency to reduce both fixed and variable costs, allowing for greater flexibility in facing potential future risks.